January 2001 Industry Update

Market Issues

After a relatively poor holiday season, manufacturers are now looking ahead and hoping for a pickup in the market over the next several months, that they believe will be driven primarily by DDR SDRAM capable components and systems. Though most users will not see significant performance gains from DDR SDRAM (meaning, more than 10% improvement over SDR SDRAM), vendors are hoping that a combination of marketing, real performance improvements for some applications and prices essentially the same as SDR SDRAM systems will bring out the upgrade crowd.

2001 does look to be the year of DDR, particularly the first half of the year. In the past, the marketing focus was primarily on processors, with some emphasis on chipsets. Memory has traditionally been relegated to almost an afterthought for many, other than the question of how much is enough. At this years Platform Conference, hosted by InQuest Market Research, approximately 40% of the presentations will be about memory technologies, issues and designs, and most of those will be discussing DDR.

It appears to me that the DIY market is a good leading indicator of the health of the PC market in general. This is because do-it-yourselfers are generally more technically knowledgeable than the average user, and are usually the ones sought out for advice on what makes a good upgrade. If this market can be persuaded to purchase and recommend, the rest of the market should soon follow. Comments from many vendors and manufacturers seem to indicate that there is a very large pent-up interest for DDR systems, despite the delays and reported problems, and feedback from site visitors seems to confirm this.

My comments last week regarding the market momentum that AMD seems to have as it pertains to motherboard shipments was met with some disbelief (just as my comments about VIA were last year). As a follow up, I contacted several other manufacturers and received confirmation. At issue was the statement that those I had spoken with indicated between 30% and 50% of their shipments were Socket A boards. Though a few indicated that their shipments were relatively small (perhaps 10% to 15%), a few others confirmed the 50% figure, and one even claimed that 70% of their motherboards are AMD based (both Socket 7 and Socket A). It would not be surprising to see most motherboard makers achieve the 30% or greater shipment numbers during the next several months as DDR hits the market in volume, though it is certainly not a given.